Dozens Arrested In In Widespread Housing Fraud And Bribery Schemes In Manhattan, Brooklyn and Queens

New York, NY – Manhattan District Attorney Cyrus R. Vance, Jr., New York City Department of Investigation (“DOI”) Commissioner Mark G. Peters, and New York City Police Commissioner William J. Bratton today announced the indictment of 50 defendants involved in widespread housing fraud and bribery schemes in Manhattan, Brooklyn, and Queens.

The defendants include 11 New York City Department of Buildings (“DOB”) employees and five New York City Department of Housing Preservation and Development (“HPD”) employees. The defendants are charged in 26 New York State Supreme Court indictments filed in New York and Kings Counties with crimes including Bribery, Bribe Receiving, Falsifying Business Records, Tampering with Public Records, and Official Misconduct.

The nearly two-year-long investigation, initiated by DOI and the Manhattan District Attorney’s Office’s Rackets Bureau in 2013, began as an inquiry into the bribery of a single DOB inspector. DOI, the District Attorney’s Office, and the NYPD utilized court-authorized wiretapping; analysis of DOB, HPD, financial, and phone records; and surveillance over the course of the investigation. The investigation revealed evidence of approximately $450,000 worth of alleged bribes in numerous, distinct schemes between 16 DOB and HPD employees and 22 property managers and owners, six expeditors, two contractors, and one engineer. Indictments filed in Kings County Supreme Court will be handled by Manhattan prosecutors, pursuant to a cross-designation authorized by Brooklyn District Attorney Ken Thompson.

“Bribery schemes compromised two important City agencies and fair competition in our robust housing and real estate development markets,” said District Attorney Vance. “Today’s cases demonstrate that the same surging demand that drives the pace of development can inspire the taking of shortcuts, and the taking of bribes. Working proactively with our partners at DOI and the NYPD, we are routing out corruption at all levels, and bringing those who abuse their positions of power to justice.”

“Our investigation revealed a widespread network of corruption in the construction industry and among the City workers charged with keeping that industry safe,” said DOI Commissioner Mark G. Peters. “We found that these 16 City employees, including several senior supervisory staff, took bribes to clear code violations including some that presented real safety threats. Today’s arrests shows that the City and law enforcement have zero tolerance for criminal conduct that undermines the City’s mandate to protect its citizens.”

“Today’s arrests and indictments show that we have zero tolerance for corruption and fraud within our city agencies,” said Police Commissioner William J. Bratton. “These building employees held important and trusted positions, but they chose to allegedly circumvent the system and violate the public’s trust to gain a profit. I want to sincerely thank the NYPD’s Organized Crime Investigation Division, the NYC Department of Investigation and the prosecutors in the Manhattan District Attorney’s Office for aggressively pursuing this case and holding these individuals responsible for their criminal actions.”

“I would like to commend DA Vance and his staff for conducting an investigation to expose this extensive and unacceptable betrayal of the public trust by city government employees,” said Brooklyn District Attorney Ken Thompson. “My office will continue to work closely with the Manhattan DA’s Office to ensure that justice is done in this case, and I pledge to continue to work closely with our law enforcement partners to root out public corruption, including corruption caused by those who try to use their money to gain an unfair advantage.”

According to court documents and statements made on the record in court, over the course of several years, 11 DOB employees, ranging in roles from clerks to chiefs, allegedly accepted bribes in Manhattan and Brooklyn in excess of $400,000. These DOB employees are charged with accepting monetary payments ranging from $200 to $3,000, and other benefits from property managers and expeditors (filing representatives registered by the DOB to act as middlemen between the Department and contractors, homeowners, and managing agents). In exchange, the DOB employees allegedly cleared complaints, Stop Work Orders, and violations, and expedited DOB inspections, enabling expeditors to bypass proper channels and deal directly with high-level DOB employees.

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